Summary

• Corning is one of the world's leading innovators in materials science company.
• Corning specializes in specialty glass, ceramics, and related materials and technologies including advanced optics, primarily for industrial and scientific applications.
• Corning and SGD Pharma announce joint venture to open new glass tubing facility and expand access to Corning® Velocity® Vial technology in India

Corning Inc. (NYSE: GLW, LSE: 0R2X) is a multinational technology company that specializes in specialty glass, ceramics, and related materials and technologies including advanced optics, primarily for industrial and scientific applications.

Recent Developments

Corning and SGD Pharma announce joint venture¹

June 08, 2023; Corning and SGD Pharma announce joint venture to open new glass tubing facility and expand access to Corning® Velocity® Vial technology in India.

Corning Incorporated and SGD Pharma announced a joint venture that includes the opening of a new glass tubing facility to expand pharmaceutical manufacturing in India and allows SGD Pharma to adopt Corning’s Velocity® Vial technology platform.

Combining SGD Pharma’s vial-converting expertise with Corning’s proprietary glass-coating technology, the collaboration will enhance vial quality, improve filling-line productivity, and speed the global delivery of injectable treatments. SGD Pharma and Corning have broken ground on a new pharmaceutical glass tubing facility in Telangana, India. Together, the two companies will help drugmakers respond to increasingly complex capacity and quality issues while meeting global demand for critical medicines.

GD Pharma joins a growing network of leading primary-packaging manufacturers adopting Corning’s cutting-edge coating technology. The joint venture expands Velocity Vials’ manufacturing footprint, localizes its supply chains in India, and enables easier adoption of the technology by customers.

Manufacturing of Velocity Vials at SGD Pharma’s facility in Vemula, India, is expected to begin in 2024. Pharmaceutical tubing production is expected to begin in 2025.

Financial Highlights

Second-Quarter 2023 Results²

• Second-quarter GAAP sales were $3.2 billion, up 2% sequentially. Core sales were $3.5 billion, up 3% sequentially, driven by Display Technologies. GAAP and core sales were down year over year, reflecting continued lower demand in several markets.
• Second-quarter GAAP EPS was $0.33, up 65% sequentially. Core EPS of $0.45 increased $0.04, or 10%, from the prior quarter. The difference between GAAP and core EPS stemmed primarily from restructuring charges and also from non-cash, mark-to-market adjustments associated with the company’s currency-hedging contracts and Japanese-yen-denominated debt. 
• Core gross margin of 36.2% and core operating margin of 17.5% increased sequentially by 100 basis points and 200 basis points, respectively, reflecting pricing and productivity improvement actions. 
• Second-quarter free cash flow improved from the first quarter to $310 million.

Company Overview

Corning traces its origins to a glass business established in 1851. The present corporation was incorporated in the State of New York in December 1936. The Company’s name was changed from Corning Glass Works to Corning Incorporated on April 28, 1989.³

The company's products are used in a wide range of industries, including:

• Optical communications: Corning is a leading manufacturer of optical fiber, which is used to transmit data over long distances at high speeds. The company also makes optical cable, connectors, and other components for optical communication systems.
• Displays: Corning is a major supplier of glass for flat-panel displays, such as liquid crystal displays (LCDs) and organic light-emitting diode (OLED) displays. The company also makes cover glass for smartphones and other mobile devices.
• Life sciences: Corning provides products and services for the life sciences industry, including laboratory glassware, cell culture media, and bioprocessing equipment. The company also makes microarrays, which are used to analyze DNA and RNA.
• Environmental technologies: Corning develops and manufactures products for environmental applications, such as water filtration systems and air pollution control devices.
• Automotive: Corning provides products and services for the automotive industry, including windshields, headlights, and rearview mirrors. The company also makes ceramic substrates for emission control systems.
• In addition to its core businesses, Corning is also involved in research and development of new technologies, such as wearable devices, augmented reality, and self-driving cars.

Some of Corning's most famous products include:

• Pyrex glassware: Pyrex is a type of borosilicate glass that is known for its heat resistance and durability. It was first introduced by Corning in 1915 and is still popular today for use in cooking and baking.
• Gorilla Glass: Gorilla Glass is a type of toughened glass that is used in smartphones, tablets, and other mobile devices. It is designed to be more resistant to scratches and cracks than traditional glass.
• Steuben glass: Steuben is a type of fine art glass that is known for its beauty and craftsmanship. It is made by Corning in a small factory in New York State.

Business Segments

Corning manufactures products at 124 plants in 15 countries and operates in five reportable segments: Optical Communications, Display Technologies, Specialty Materials, Environmental Technologies and Life Sciences.

Optical Communications Segment

The company invented the world’s first low-loss optical fiber in 1970. Since that milestone, Corning has continued to pioneer optical fiber, cable and connectivity solutions. As global demand driven by video usage grows exponentially, telecommunications networks continue to migrate from copper to optical-based systems that can deliver the required cost-effective capacity. The company's experience puts it in a unique position to design and deliver optical solutions that reach every edge of the communications network.

The Optical Communications segment is divided into two main product groupings – carrier network and enterprise network. The carrier network group consists primarily of products and solutions for optical-based communications infrastructure for services such as video, data and voice communications. The enterprise network group consists primarily of optical-based communication networks sold to businesses, governments and individuals for their own use.

The Optical Communications segment represented 34% of Corning’s total segment net sales in 2022.

Display Technologies Segment

The Display Technologies segment manufactures glass substrates for flat panel displays, including liquid crystal displays (“LCDs”) and organic light-emitting diodes (“OLEDs”) that are used primarily in televisions, notebook computers, desktop monitors, tablets and handheld devices. This segment develops, manufactures and supplies high quality glass substrates using technology expertise and a proprietary fusion manufacturing process, which the company invented and is the cornerstone of its technology leadership in the display glass industry. The company's highly automated process yields glass substrates with a pristine surface and excellent thermal stability and dimensional uniformity – essential attributes in the production of large, high-performance display panels. The company's fusion process is scalable and the company believe it is the most cost-effective process for producing large size substrates.

The Display Technologies segment represented 22% of Corning’s total segment net sales in 2022.

Specialty Materials Segment

The Specialty Materials segment manufactures products that provide more than 150 material formulations for glass, glass ceramics and crystals, as well as precision metrology instruments and software to meet requirements for unique customer needs. Consequently, this segment operates in a wide variety of commercial and industrial markets including materials optimized for mobile consumer electronics, semiconductor equipment optics and consumables, aerospace and defense optics, radiation shielding products, sunglasses and telecommunications components.

The company's highly durable glass, known as Corning® Gorilla® Glass, is a chemically strengthened thin glass designed specifically to function as a cover, or back-enclosure glass, for mobile consumer electronic devices such as mobile phones, tablets, laptops and smartwatches. Elegant and lightweight, Corning® Gorilla® Glass is durable enough to resist many real-world events that commonly cause wear or scratch damage and glass failure, while providing optical clarity, touch sensitivity and RF transparency, thus enabling exciting new applications in technology and design. In 2022, Corning unveiled its newest glass innovation, Corning® Gorilla® Glass Victus® 2, which delivers improved cover glass drop performance on rough surfaces like concrete, while preserving the scratch resistance of Corning® Gorilla® Glass Victus®. Corning® Gorilla® Glass is manufactured in the United States (“U.S.”), South Korea and Taiwan.

The company invented the world’s first transparent, color-free glass-ceramic suitable for smartphone applications, which is featured as “Ceramic Shield” on the front cover of the latest iPhone models. The company partnered with Apple to develop and scale the manufacturing of Ceramic Shield, which offers unparalleled durability and toughness.

The company's semiconductor optics include high-performance optical materials including Corning® HPFS® Fused Silica and Corning® ULE® Ultra-Low Expansion Glass, optical-based metrology instruments and custom optical assemblies for applications in the global semiconductor industry. The company's semiconductor optics products are manufactured in New York.

The Specialty Materials segment represented 14% of Corning’s total segment net sales in 2022.

Environmental Technologies Segment

The Environmental Technologies segment manufactures ceramic substrates and filter products for emissions control in mobile applications around the world. In the early 1970s, the company developed an economical, high-performance cellular ceramic substrate that is now the standard for catalytic converters in vehicles worldwide. As global emissions control regulations tighten, Corning has continued to develop more effective and durable ceramic substrate and filter products for gasoline and diesel applications, most recently launching low-mass Corning® FLORA® substrates and Corning® DuraTrap® GC gasoline particulate filters. The company manufacture substrate and filter products in New York, Virginia, China and Germany. The company sell its ceramic substrate and filter products worldwide to catalyzers and manufacturers of emission control systems who then sell to automotive and diesel vehicle or engine manufacturers. Although most sales are made to the emission control systems manufacturers, the use of its substrates and filters is generally required by the specifications of the automotive and diesel vehicle or engine manufacturers.

The Environmental Technologies segment represented 11% of Corning’s total segment net sales in 2022.

Life Sciences Segment

As a leading developer, manufacturer and global supplier of laboratory products for over 105 years, the Life Sciences segment works with researchers and drug manufacturers seeking to drive innovation, increase efficiencies, reduce costs and compress timelines. Using unique expertise in the fields of materials science, polymer surface science, cell culture and cell biology, the segment provides innovative solutions that improve productivity and enable breakthrough research for traditional small molecule, or chemical, drugs, biologics, vaccines and emerging cell and gene therapies.

Life Sciences products include consumables, such as plastic vessels, liquid handling plastics, specialty surfaces, cell culture media and serum, as well as general labware, glassware and equipment. These products are used for drug discovery research and development, compound screening, diagnostics, advanced cell culture research, genomics applications and mass production of cells for clinical trials and bioproduction.

The company sell life sciences products under the Corning®, Falcon®, PYREX® and Axygen® brands. The products are marketed globally, primarily through distributors, to pharmaceutical and biotechnology companies, contract manufacturing organizations, central testing labs, academic institutions, hospitals, government entities and other facilities. The company manufacture these products in California, Illinois, Maine, Massachusetts, New York, North Carolina, Utah, Virginia, China, France, Mexico, Brazil and Poland.

The Life Sciences segment represented 8% of Corning’s total segment net sales in 2022.

Hemlock and Emerging Growth Businesses

All other businesses that do not meet the quantitative threshold for separate reporting have been grouped as Hemlock and Emerging Growth Businesses. This group is primarily comprised of the results of Hemlock Semiconductor Group (“HSG”), which the company obtained a controlling interest in during the third quarter of 2020 and have consolidated its results beginning on September 9, 2020. 

HSG is a leading provider of high-purity polysilicon products for the solar power and electronics industries. HSG operates in the solar power market, as polysilicon is needed in the manufacturing process to produce sustainable solar power cell, panels and arrays, and the electronics markets, as polysilicon is used to create fabricated wafers and integrated circuit chips used by leading semiconductor manufacturers.

Hemlock and Emerging Growth Businesses represented 11% of Corning’s total segment net sales in 2022.

Brands

The company's principal trademarks include the following:

• Axygen
• Celcor
• ClearCurve
• Corning
• DuraTrap
• Eagle XG
• Edge8
• Everon
• Evolv
• Falcon
• Gorilla
• Guardiant
• HPFS
• Leaf
• PYREX
• RocketRibbon
• SMF-28e
• Steuben
• UniCam
• Valor
• Velocity
• Victus
• Viridian

Patents

The following table presents the approximate number of patents granted to its reportable segments:

Company History

Corning's long history of innovation begins with the development of a bulb-shaped glass encasement for Thomas Edison's new incandescent lamp.⁴

• 1851: Corning Glass Works is founded in Corning, New York.
• 1879: Corning develops the bulb-shaped glass encasement for Thomas Edison's new incandescent lamp.
• 1908: Corning invents a new manufacturing process that allows for the mass production of light bulbs, making them more affordable to the masses.
• 1913: Corning develops Pyrex® glass, a borosilicate glass that is heat-resistant and chemically inert. Pyrex® is used in a wide variety of applications, including laboratory glassware, cookware, and ovenware.
• 1970: Corning invents low-loss fiber optics, which revolutionizes telecommunications. Fiber optics are used to transmit data at high speeds over long distances.
• 2006: Corning introduces Epic® label-free technology, which is used in drug discovery to identify potential new drugs more efficiently.
• 2007: Corning develops Gorilla® Glass, a tough, scratch-resistant glass that is used in smartphones, tablets, and other electronic devices.
• 2017: Corning develops Willow® Glass, a flexible glass that is thinner and lighter than traditional glass. Willow® Glass is used in a variety of applications, including wearable devices and foldable displays.

These are just a few of the many innovations that Corning has developed over its 170-year history. 

Here are some other notable innovations from Corning:

• Chemcor® glass, a chemically resistant glass that is used in the manufacture of semiconductors and other electronic devices.
• Codera® glass, a high-performance glass that is used in aerospace applications.
• Valor® glass, a pharmaceutical glass that is used to package and protect sensitive drugs.
• Willow™ Aerogel, a lightweight, insulating material that is used in a variety of applications, including building materials and insulation.

References

1. ^ https://investor.corning.com/investor-relations/news-and-events/details/2023/Corning-and-SGD-Pharma-announce-joint-venture-to-open-new-glass-tubing-facility-and-expand-access-to-Corning-Velocity-Vial-technology-in-India/default.aspx
2. ^ https://investor.corning.com/investor-relations/news-and-events/details/2023/Corning-Reports-Second-Quarter-2023-Financial-Results-with-Notable-Progress-on-Profitability-and-Cash-Flow/default.aspx
3. ^ https://fintel.io/doc/sec-corning-inc-ny-24741-10k-2023-february-13-19401-8447
4. ^ https://www.corning.com/in/en/innovation/culture-of-innovation/the-history-of-corning-innovation.html